Overview

Mexico’s National Power System (Sistema Eléctrico Nacional or SEN) is one of the largest in the world and it provides electrical supply to more than 129 million inhabitants. SEN planning is based on clear criteria for the installation of new power plants that guarantee a sufficient, efficient, quality, reliable, continuous, safe, and sustainable electricity supply. The SEN encompasses nine regions plus a binational electricity system in Baja California. Most of the nine regions are interconnected, forming the National Interconnected System (Sistema Interconectado Nacional or SIN). The Baja California system operates in the Western Interconnection of the United States, overseen by the Western Electricity Coordinating Council (WECC). 

According to Mexico’s National Power System Development Program (Programa de Desarrollo del Sistema Eléctrico Nacional or PRODESEN), the electricity consumption of the National Electricity System was 298,599 GWh in 2023, which represented an increase of 3.4 percent in comparison to 2022. This increase is attributed to six sectors: residential, commercial, services, agricultural, and medium and large enterprises. In 2023, the National Power System registered power generation of 351,695 GWh, from which 58.46 percent corresponded to combined cycle and the rest to gas, coal, internal combustion, hydro, wind, solar nuclear, geothermal and efficient cogeneration. In 2023, there were 12.2 percent total losses in comparison to 2022. The total installed capacity in 2023, including power generation plants from the Federal Electricity Commission (Comisión Federal de Electricidad or CFE) and from private companies, interconnected and from distributed generation reached 93,788 MW. 

Key drivers for this sector are increasing consumption, the installed capacity needed to satisfy the electricity demand, and changes in the regulation. According to the International Energy Agency, Mexico’s population is expected to grow to over 150 million by 2050, considerably increasing energy demand. The industrial and commercial sectors account for 72 percent of electricity demand, representing the strongest opportunity for U.S. exports given the need to reduce energy costs and improve energy efficiency. It is estimated that consumption will increase 2.8 percent annually on average between 2024 and 2038. It is expected that the installed capacity will increase 23,992 MW between 2024-2027, 58,736 MW between 2028-2038, and 82,728 MW between 2024-2038, to reach a total of 176,516 MW by 2038. 

The electrical power sector has faced several policy changes under the current presidential administration, and those changes are altering the dynamics of the electricity market for private sector participants. Strengthening the role of CFE so it remains Mexico’s primary supplier of electricity has been a top priority of the Government of Mexico (GOM).

On March 18, 2025, President Claudia Sheinbaum enacted a sweeping energy reform package that restructures Mexico’s power sector in favor of state-owned companies. The package includes eight new secondary laws and amendments to three existing laws, implementing the framework laid out in Sheinbaum’s October 2024 constitutional reform. These changes largely reverse the liberalization introduced in Mexico’s 2014 energy reform, significantly restricting private-sector participation.

Under the new laws, at least 54 percent of the electricity dispatched to the national grid must come from Federal Electricity Commission (CFE) plants, leaving up to 46 percent for private sector producers. In addition, the reforms dissolve Mexico’s independent energy regulators -the National Hydrocarbons Commission (CNH) and the Energy Regulatory Commission (CRE)- replacing them with a centralized National Energy Commission (CNE) reporting directly to the executive branch.

These legislative changes align with Sheinbaum’s broader energy agenda, known as Plan México, which aims to add 22 gigawatts of new power generation capacity by 2030, deliver a portfolio of 100 transmission and distribution projects, and ensure the CFE holds at least 54 percent market share in electricity generation. While the government frames these reforms around goals of sustainability and energy security, the shift raises concerns among private and foreign stakeholders about regulatory transparency, investment risk, and market competition.

Despite the increasingly state-dominant landscape, opportunities remain for U.S. companies that align with Mexico’s clean energy and grid modernization priorities. Mexico’s push to expand renewable energy continues to create demand for solar, wind, geothermal, and energy storage technologies, along with smart grid and industrial efficiency solutions.

The new laws define six pathways for private sector participation in electricity generation:

1.    On-site distributed generation up to 0.7 MW, exempt from permit requirements 
2.    Self-generation systems between 0.7-20 MW, not connected to the national grid 
3.    Self-generation systems between 0.7-20 MW with grid connection, where surplus power must be sold exclusively to the CFE 
4.    Open competition for projects larger than 0.7 MW participating in Mexico’s wholesale electricity market 
5.    Utility-scale projects developed privately, with electricity sold exclusively to the CFE and possible asset transfer 
6.    Joint ventures with the CFE, in which the CFE holds a minimum 54 percent ownership stake 
 

CFE’s Business Plan is aligned with the government’s priority to support CFE in regaining its leadership position. CFE is a State Productive Enterprise comprised of 10 subsidiaries, five affiliated companies, and four business units. This structure presents operational, administrative, and financial challenges since there is legal separation in all activities of the different companies. The subsidiaries oversee public electricity service through six companies in charge of power generation. Another three subsidiaries oversee transmission, distribution, and supply of electricity. 

On August 21, President Claudia Sheinbaum announced CFE’s Strengthening and Expansion Plan 2025-2030 to invest over 8.1 billion dollars to strengthen the transmission network in the benefit of 50 million users of electricity in Mexico. The plan envisions the construction of 275 new transmission lines and 524 electrical substations. This plan also projects interconnecting the Baja California peninsula with the rest of the country. With this plan, the generation capacity will increase by 29,074 MW. Most of this increase will come from CFE, with 22,674 MW, and 6,400 MW will be allowed for the private sector.

Trade Statistics

Table: Mexico Power Generation Equipment Market Size (USD Billions)

Source: INEGI, U.S. International Trade Administration, Global Trade Atlas (HS Codes 8501, 8502, 8503) 

Leading Sub-sectors

Power generation, energy efficiency, distributed generation, energy storage technologies, and small-scale renewable energy projects  

Opportunities

Mexico’s electrical power industry mainly offers opportunities for U.S. products, services, and technologies for energy efficiency, distributed generation, energy storage, transmission and distribution.

Resources

• Mexican Secretariat of Energy (SENER)
• National Control Center for Energy (CENACE)
• Federal Electricity Commission (CFE)
• National Energy Commission (CNE)
• National Institute of Electricity and Clean Energy (INEEL)
• Trust for Electric Energy Saving (FIDE)
• National Commission for Energy Efficiency (CONUEE)
• Federal Commission for Regulatory Improvement (CONAMER)

Events

• Power-Gen International, January 20-22, 2026. San Antonio, TX
• Distributech International, February 2-5, 2026. San Diego, CA.
• Expo Eléctrica Internacional, May 26-28, 2026. Mexico City

Commercial Specialist

For further information and assistance in exploring opportunities in Mexico’s power sector, contact: Claudia Salgado (Claudia.Salgado@trade.gov)